Study: Megaupload closure boosted Hollywood sales 10%

Based on Tinseltown's figures, that is

A new study claims that the revenues of two anonymous Hollywood studios rose between 6 to 10 per cent in countries where digital sales are available, after the cyberlocker site Megaupload was shut down.

"Our analysis shows that the shutdown of a major online piracy site can increase digital media sales, and by extension we provide evidence that Internet movie piracy displaces digital film sales and rentals," said the study by Brett Danaher from Wellesley College department of economics and Michael D. Smith from Carnegie Mellon University.

The research comes from the Carnegie Mellon University's Initiative for Digital Entertainment Analytics (IDEA), which tracked the number of Megaupoload users in 12 countries by using Google AdWords estimates. The sales and rental data for the period came from two anonymous studios, but only for digital sales since the data for physical media was deemed "less reliable".

After armed police raided the New Zealand home of Kim Dotcom by helicopter and shut down Megaupload, the academics noted a 7-to-10 per cent increase in digital sales revenue and a 4-to-7 per cent increase in rentals, using an average price of $15 and $4.50 respectively. The study adjusted its figures to account for the Christmas sales rush.

"The bottom line is that this study provides empirical proof that shuttering Megaupload stopped users from accessing its stolen wares, and steered them toward the many legitimate sources for movies online," Kate Bedingfield, a spokesperson for the MPAA told El Reg.

"Actions like those against Megaupload won't solve the piracy problem on their own," Bedingfield said, "but they are a necessary and vital tactic that helps foster a playing field where legal services can thrive, enabling the movie makers to distribute their creative product in more new and innovative ways every day."

The academics were keen to stress that the study wasn't funded by the MPAA, and that the anonymous studios providing the sales data had no editorial control – but it's worth noting that IDEA itself was created last year with funds provided by the MPAA. ®